Bank of Canada suggests Canada will emerge from recession ahead of peers

Canada will emerge from recession on a stronger footing than other major economies that are burdened with weaker financial systems, Bank of Canada Governor Mark Carney said on Tuesday.

While Canada's recovery in part will depend on the progress of other major economies, domestic growth will outpace growth in other countries reeling from the global economic slowdown, Carney said after a speech in Halifax, Nova Scotia.

"In terms of growth in 2010, we expect, subject to the stabilization of the global financial system ... that most of the major economies are going to grow," Carney said.

"We expect Canadian growth to be stronger than those other economies in part because we don't have those overhangs of imbalances and lagged effects of a recovery in our financial system than those other economies have."

Carney, speaking a week after the central bank lowered its key overnight rate to a 50-year low of 1 percent, said the domestic economy will begin recovering later this year as a series of interest rate cuts begin to take hold.

His comments mirrored projections released by the bank last week when it unveiled its quarterly economic update. The bank said Canada's economy would contract by 4.8 percent annualized in the first quarter, 1 percent in the second and then return to growth.

Carney also said additional measures to shore up financial systems in a number of other jurisdictions are still necessary, but added that Canada does not have the same fundamental problems.

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